iexclusivenews – Cast out of China’s digital wilderness, Bitcoin miners embark on a daring exodus, seeking refuge and riches in the unlikely land of Ethiopia.
In the spring of 2023, a curious sight appeared near some of the power stations connected to the Grand Ethiopian Renaissance Dam, the largest hydroelectric project in Africa.
They were shipping containers filled with powerful computers that consumed huge amounts of electricity.
These were the machines of Chinese Bitcoin miners, who had been searching for a new home since China banned their industry in 2021.
They had finally found a crypto haven in Ethiopia, a country in the Horn of Africa that offered some of the lowest electricity prices in the world and a welcoming government.
Ethiopia had allowed Bitcoin mining since 2022, despite prohibiting cryptocurrency trading, as part of its efforts to strengthen its ties with China.
Several Chinese firms had helped construct the US$4.8 billion dam, which had a capacity of 6,450 megawatts and could provide enough power for the miners.
The Challenges And Risks Of Bitcoin Mining
Bitcoin mining is the process of creating new units of the digital currency by using specialized computers to solve complex mathematical problems and verify transactions on the blockchain.
A distributed ledger that records all Bitcoin activity. Miners receive Bitcoin rewards for their work, which they can sell for fiat money or reinvest in more equipment.
However, Bitcoin mining is not an easy or stable business.
It requires a lot of capital, technical expertise, and constant adaptation to changing market conditions and regulations.
Bitcoin mining is also a major contributor to global warming, as it consumes more electricity than many countries and emits large amounts of greenhouse gases.
This has led to a backlash against Bitcoin mining in many parts of the world, especially in developing countries that face power shortages and social unrest.
Kazakhstan, Iran, and Mongolia are some of the countries that have cracked down on Bitcoin mining in recent years, citing environmental and economic concerns.
China, which used to be the global leader in Bitcoin mining, with more than half of the network’s computing power, banned the industry in 2021, citing financial risks and energy waste.
This forced many Chinese miners to relocate to other countries, such as the United States, Canada, and Russia, where they faced fierce competition from local players.
The Opportunities And Prospects Of Ethiopia
Ethiopia, however, has emerged as a rare opportunity for Chinese miners, who still have a strong presence and influence in the Bitcoin mining sector.
According to Luxor Technology, a mining services provider, Ethiopia has become one of the top destinations for Bitcoin mining equipment in the world, with shipments starting in September 2023.
The state-owned Ethiopian Electric Power Corporation has signed contracts with 21 Bitcoin mining companies, 19 of which are Chinese, to supply them with electricity from the dam.
Nuo Xu, the founder of China Digital Mining Association, a trade group that organizes events and facilitates deals in the mining industry, said that Ethiopia would become one of the most popular places for Chinese miners.
He is planning to take a group of Chinese mining executives to Ethiopia to scout for potential sites.
The fact that Chinese miners are willing to invest millions of dollars in a country that is still recovering from a civil war that broke out in 2022 in its northern region.
Shows how desperate and determined they are to find a stable and profitable environment for their business.
However, Ethiopia is not without its own challenges and risks.
The country still faces political and social instability, as well as humanitarian and security crises.
Nearly half of its population lacks access to electricity, which makes Bitcoin mining a sensitive and controversial issue.
The government, while supportive of Bitcoin mining, is also cautious of the potential backlash and criticism it may face from its citizens and the international community.
Therefore, the future of Bitcoin mining in Ethiopia is uncertain and depends on many factors, such as the price of Bitcoin, the availability and cost of electricity, the regulatory environment, and the public opinion.
For now, Ethiopia is a new Bitcoin mining paradise for Chinese firms, but it may not last forever.